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BRITISH CALEDONIAN GROUP ANNOUNCES BIG LOSSES
<British Caledonian Group>, Britain's second largest airline, has announced a 19.3 mln stg pretax loss for the financial year ending last October, compared with a record pre-tax profit of 21.7 mln stg in 1985, chairman Sir Adam Thomson told reporters. A decline in U.S. Transatlantic traffic following terrorist attacks in Europe, the U.S. Bombing of the Libya, the Chernobyl disaster and a slump in the oil industry which affected Middle East traffic were the main causes of the loss, Thomson said. He said the poor results were caused by "a range of exceptional circumstances wholly outside our direct control" and predicted a return to profitability this year. Last year, the airline was forced to axe 1,000 jobs, sell some of its assets and cut the number of its flights across the Atlantic and to the Middle East following the fall in business .
Financial Reports
FED ADDS RESERVES VIA CUSTOMER REPURCHASES
The Federal Reserve entered the U.S. Government securities market to arrange 1.5 billion dlrs of customer repurchase agreements, a Fed spokesman said. Dealers said Federal funds were trading at 6-1/4 pct when the Fed began its temporary and indirect supply of reserves to the banking system.
Commodities and Trade
HAPAG ORDERS NEW CONTAINER SHIP FROM CHINA
<Hapag Lloyd AG> said it ordered a new container vessel from China for its Australia service. The order was given to the <Hudong shipyards> in Shanghai after lengthy negotiations with West German shipbuilders, the company said in a statement. The Chinese firm offered to build the vessel at over 30 mln marks less than West German yards, despite government subsidies which Bonn pays its ailing shipbuilding industry, Hapag said. A company spokesman would not comment on the total order value but said the new vessel would replace the 33,333 dwt Sydney Express in 1989 and would carry 2,700 container units.
Financial Reports
FRENCH CGE UNIT TAKES 34 PCT STAKE IN ESCA CORP
State-owned <Cie Generale d'Electricite>'s electrical contracting unit <CGEE ALSTHOM> has taken a 34 stake in the U.S. Computer firm <ESCA Corp>, CGEE ALSTHOM chairman Philippe Boisseau told a press conference. According to an agreement in principle between the two companies CGEE ALSTHOM could take a majority stake in the future but no time-scale has been set, he added. ESCA, which had a turnover of 13.6 mln dlrs in 1986 and is expected to see this rise to 20 mln this year, is one of the leading U.S. Suppliers of electric despatching and telecontrol systems.
Financial Reports
PARTNERS CALL GENCORP <GY> RESPONSE UNPRODUCTIVE
General Acquisition Co said it was disappointed by Gencorp's response to its tender offer and asked how the company might give better value to shareholders. Gencorp had earlier urged shareholders to reject a 100 dlr per share tender offer from General Acquisition, an affiliate of Wagner and Brown and AFG Industries Inc, and said it was studying financially superior alternatives. The General Acquisition partnership called the response inflammatory and unproductive, particularly since it had tried to discuss the offer with Gencorp. The partnership said Gencorp failed to say how it would provide a "superior value yet they continue their attempt to prevent a satisfactory offer by failing to redeem their poison pill." Poison pills are shareholder rights plans that make takeovers more expensive. Gencorp said in its statement earlier that it planned to put off the date its rights will trade separately from the common stock to April 6 from April 3. It said the extension was subject to further extensions by the board and is conditional on no person acquiring beneficial ownership of 20 pct or more of Gencorp before April 6. General Acquisition said it is confident its offer can be completed in a timely manner using its financial arrangements. The partnership in its statement again urged Gencorp management to work with it to facilitate a transaction.
Financial Reports
U.S. MAY DROP TARIFFS IF JAPAN OPENS - YEUTTER
The U.S. Is willing to drop tariffs on Japanese electronic imports if Japan shows it will abide by an agreemement opening its markets to American goods, U.S. Trade Representative Clayton Yeutter said in a TV interview. "But there has to be a clear indication that they are willing to act," he said. Yeutter said difficulties in the Japanese economy caused by the U.S. Tariffs and the yen's rise against the dollar are problems "they have brought on themselves." The dollar fell to 40-year lows against the yen today. "Certainly the movement of the yen is causing some economic turmoil in Japan," he said. "My only response is that we have gone through about five years with the dollar going in just the opposite direction. Although I can sympathise, it's occurred for only a few weeks or months in Japan." The tarriffs, announced on Friday by President Reagan, will affect about 300 million dlrs worth of products, only a tiny fraction of Japan's total exports to the U.S. Even so, Reagan's decision "doesn't give us any joy. We don't want to take retaliatory action here if we don't have to," Yeutter said. Yeutter said the meetings scheduled next month in Washington between Reagan and Prime Minister Yasuhiro Nakasone will include "some difficult items on the agenda." Japan has failed to implement two parts of a three-part semiconductor agreement, Yeutter said. Japan has stopped dumping chips in the U.S. But it has failed to open its domestic markets to U.S.-made chips and has failed to end predatory pricing in Third World countries, undercutting U.S. Products, he said.
Financial Reports
SEDGWICK BUYS BSI INCORP
Sedgwick Group Plc <SDWK.L> said its wholly-owned Canadian subsidiary Sedgwick Tomenson Inc had acquired BSi Incorp for a maximum eight mln Canadian dlrs. The funds will be raised through the issue of up to 1.16 mln ordinary Sedgwick shares to the vendors of BSi by no later than 31 January 1991. Some 427,054 shares already have been issued. BSi is a privately-held Canadian company involved in actuarial, employee and executive benefits consulting and administration. Its 1986 pretax profits excluding extraordinary items totalled 1.14 mln Canadian dlrs.
Other
U.K. MONEY MARKET SHORTAGE FORECAST REVISED UP
The Bank of England said it had revised its estimate of the deficit in the money market today up to a record two billion stg, before taking account of its morning operations, from 1.85 billion at midday. The Bank has provided the system with around 1.71 billion stg assistance so far today.
Financial Reports
REXNORD <REX> SELLS UNIT TO NEOAX <NOAX>
Rexnord Inc, 96 pct owned by Banner Industries Inc <BNR> following a recent tender offer, said it has completed the sale of its Fairfield Manufacturing Co subsidiary to NEOAX Inc for 70.5 mln dlrs in cash. Rexnord said it still plans to sell its Process Machinery Division and Mathews Conveyor Co as part of its planned program to divest five businesses with 200 mln dlrs in assets. Bellofram Corp and Railway Maintenance Equipment Co have already been sold.
Financial Reports
U.S. LEADING INDICATORS ROSE 0.7 PCT IN FEB AFTER REVISED 0.5 PCT JAN FALL
U.S. LEADING INDICATORS ROSE 0.7 PCT IN FEB AFTER REVISED 0.5 PCT JAN FALL
Financial Reports
JAPAN WILL ASK COMPANIES TO BOOST IMPORTS
Japan's Minister of International Trade and Industry, Hajime Tamura, will meet representatives from 151 of the nation's largest companies next week and appeal to them to do their best to increase imports, ministry officials said. The meeting was unveiled as part of a plan to boost imports and help head off protectionist legislation in the U.S. Senior officials from the Ministry of International Trade and Industry told reporters that such personal appeals appeared to have paid off in the past, as Japanese imports of manufactured goods have climbed. Leading domestic semiconductor makers will boost imports and cut production of key memory microchips next month in an attempt to help ward off U.S. Trade sanctions, company spokesmen said. The officials also said they expect the government's new trade insurance law to boost imports and encourage Japanese companies to set up production facilities overseas. Under the new law, the government will insure Japanese companies who pre-pay for imports against loss arising from everything from war to bankruptcy of the foreign firm they are dealing with. MITI estimated that it would help solve Japan's trade problem to the tune of about $10 billion dlrs a year.
Commodities and Trade
U.S. LEADING INDEX ROSE 0.7 PCT IN FEBRUARY
The U.S. index of leading indicators rose a seasonally adjusted 0.7 pct in February after a revised 0.5 pct January fall, the Commerce Department said. The department previously said the index fell 1.0 pct in January. The February increase left the index at 187.1 over its 1967 base of 100, and was led by a rise in stock prices. A total of four of nine indicators available for February contributed to the increase in the index. Besides stock prices, they were manufacturers' new orders for consumer goods and materials, average work week and building permits. Five of nine indicators were negative. They were change in sensitive materials prices, money supply, vendor performance, average weekly initial claims for state unemployment insurance, and contracts and orders for plant and equipment. The main factor in the January revision was contracts and orders for plant and equipment, the department said. December also was revised to a 2.4 pct rise from an earlier 2.3 pct rise due to a change in outstanding credit. The index of coincident indicators, which measures the current economy, rose 0.9 pct in February after a decline of 1.3 pct in January and a rise of 0.9 pct in December. The index of lagging indicators, which measures past economic activity, decreased 0.3 pct in February after increasing 1.7 pct in January and falling by 0.5 pct in December. The department said it has suspended net business formation from the leading indicators index because it has deteriorated as a measure of change in the business population.
Other
U.K. MONEY MARKET GIVEN FURTHER 168 MLN STG HELP
The Bank of England said it had provided the money market with a further 168 mln stg assistance in the afternoon session. This takes the Bank's total help so far today to 1.88 billion stg and compares with its estimate of a record two billon stg shortage in the system. The central bank purchased bank bills outright comprising 25 mln stg in band one at 9-7/8 pct, 138 mln stg in band two at 9-13/16 pct and three mln stg in band three at 9-3/4 pct. It also bought two mln stg of treasury bills in band two at 9-13/16 pct.
Corporate News
ICO BOARD PASSES OVER COFFEE QUOTA ISSUE
Executive board members of the International Coffee Organization, ICO, passed over the issue of export quota negotiations at its regular meeting here, delegates said. No move was made to reopen dialogue on export quotas and no further discussion on the issue is likely during the three-day talks, they said. Producer and consumer members of the ICO council failed to agree export quota shares in early March. Neither Brazil, the largest producer, nor the U.S., the largest consumer, are ready to be flexible, delegates said. "The situation is unchanged," consumer spokesman Abraham Van Overbeeke told reporters. "As long as Brazil sticks to its position there will not be quotas -- there is no point in meeting." At the last council meeting, Brazil wanted to maintain its previous quota share of around 30 pct of the market. Consumers and a splinter group of eight producers favoured redistribution of export shares using "objective criteria," which would likely have reduced Brazil's share. Brazilian delegate Lindenberg Sette said that, if quota negotiations were to resume, the 1.0 mln bag shortfall Brazil was willing to give up in early March if the producer proposal was accepted would no longer be on the table. "As we said from the start...No agreement, no one million bags," he told Reuters. Shortfalls of 200,000 bags offered by OAMCAF, the African and Malagasy Coffee Organization, and 20,000 bags offered by Angola, are also no longer valid, delegates said. The closest the board came to discussing quotas was a briefing by the Guatemalan ICO delegate Rene Montes on a recent Latin American producers meeting in Managua, delegates said. There, the producers expressed their political will to negotiate basic quotas, particularly in the face of the damaging drop in coffee prices after the council failed to agree quotas, Montes said. The ICO board also reviewed export statistics and stock verification. They expected talks on stock verification to take up the remainder of today's session, delegates said.
Corporate News
HUDSON FOODS <HFI> TO MAKE ACQUISITION
Hudson Foods Inc said it has agreed in principle to acquire Thies Cos Inc, a poultry, beef and pork products provider to midwest supermarkets and food distributors with sales of about 69 mln dlrs for the year ended November One. The company said a definitive agreement is expected to be signed in April. Terms were not disclosed.
Financial Reports
IVORY COAST BOOSTS MAIZE OUTPUT
Ivory Coast maize output has risen steadily during the last two decades and the country aims to produce two mln tonnes annually "very rapidly," the official daily Fraternite Matin reported. It said the country reached self-sufficiency in maize three years ago and harvested a record 530,000 tonnes in 1985 compared with only 200,000 tonnes 20 years earlier. The daily did not detail 1986 output but said further production increases are anticipated in the years ahead as part of a policy of boosting domestic output to cut grain imports.
Financial Reports
ESSO MALAYSIA REPORTS HIGHER PROFIT IN 1986
Esso Malaysia Bhd, a unit of Exxon Corp of the U.S., Reported net profit of 70 mln ringgit from its petroleum and ammonia operations in 1986 compared with 48.7 mln in 1985. Chairman Gerald F Cox said the improved performance was mainly due to product prices falling more slowly than crude prices during the year. He added that total sales volume increased as a result of higher offtake by affiliated companies, while inland market sales were maintained at around the previous year's levels. But growth prospects in 1987 remained weak and 1986 results are unlikely to be repeated in the current financial year.
Financial Reports
THAILAND BUYS YUGOSLAV CRANES IN BARTER DEAL
The Cabinet approved a plan for the Port Authority of Thailand to buy six gantry cranes from Metalna Co of Yugoslavia for about 13.4 mln dlrs, a government spokesman said. He said Thailand will pay for 25 pct of the cost of the cranes in U.S. Dlrs and the rest by sales of rice, textiles and other commodities to Yugoslavia. The Bangkok Shipowners and Agents Association has appealed to the government to scrap the purchase plan. It said it would be an unnecessary expense as most vessels calling at the port already have their own cargo handling equipment.
Financial Reports
JEWELMASTERS <JEM> SEES NET BELOW ESTIMATES
Jewelmasters Inc said it expects to report net income for the year ended January 31 20 to 25 pct below analysts' estimates of 1,750,000 dlrs or 95 cts per share. Jewelmasters sales sales for the year just ended were about 52.5 mln dlrs. In the prior year it earned 1,650,000 dlrs on sales of 45.1 mln dlrs. Jewelmasters said net income for the year was hurt by disappointing sales in December and January, a high level of advertising spending in the fourth quarter, higher than expected opening expenses for 34 additional units and an adjustment to inventory associated with a shift to a more comprehensive inventory system. Jewelmasters said it expects to report audited results for the fourth quarter and year in about three weeks.
Financial Reports
ALUMINIUM CAPACITY GROWTH TREND SEEN INSUFFICIENT
Aluminium capacity expansion planned for the period after 1990 will be insufficient to supply any acceleration in demand growth, let alone an increase on the scale which seems likely, according to analyst Anthony Bird Associates' 1987 Aluminium Review. By 1995 non-socialist world primary capacity will need to be around 18 mln tonnes, whereas on current plans only 15 mln tonnes are scheduled, Bird said. Bird forecast higher economic growth after 1990 and increased imports by less developed countries. Aluminium consumption growth is not expected to accelerate by as much as general growth, but non-socialist world consumption is nevertheless forecast to increase sharply from 13.77 mln tonnes in 1990 to 17.25 mln tonnes in 1995, Bird said. Aluminium companies were slow to adjust to the pace of change after 1973, the review said, and now they have completed this transition they may be in danger of remaining preoccupied with the strategies of retrenchment and survival which have served them well in recent years. In order to encourage the construction of additional smelters aluminium prices will need to settle at a higher level. Production costs are likely to rise again in the years ahead as the glut of alumina capacity vanishes and electricity suppliers take a more aggressive line with aluminium companies, according to the review. At March 1987 prices the three most likely cost-price scenarios call for a long-run aluminium price of between 73 and 89.5 cents a lb, depending on exchange rates, Bird said. Such a price development is not expected to cause any marked competitive problems for the metal because of the likely rise in commodity prices as a whole and cost pressures in the pipeline for steel and copper. In the short term, however, the outlook is dull, Bird said, as the world economy has not responded well to the opportunities offered by cheap oil. Its 1987 consumption forecast of 13.01 mln tonnes is 0.4 pct down on 1986, while production is forecast six pct higher in 1987 at 12.67 mln tonnes.
Financial Reports
ALPHA INDUSTRIES <AHA> SELLS DIVISION
Alpha Industries Inc said it has sold its Microelectronics Division to Triax Corp for undisclosed terms, retroactive to February One. It said the division has yearly revenues of about 12 mln dlrs and makes RF microwave components for the defense electronics industry. Alpha said it plans to concentrate on the high frequency portion of the electromagnetic spectrum.
Commodities and Trade
NORWEGIAN UNEMPLOYMENT FALLS IN MARCH
Unemployment fell in March to 36,510, or 1.7 pct of the workforce, compared with 39,700 (1.9 pct) in February and 38,839 (2.2 pct) in March 1986, the Labour Directorate said.
Financial Reports
J.C. PENNEY DECLARES TWO FOR ONE SPLIT, RAISES QUARTERLY
J.C. PENNEY DECLARES TWO FOR ONE SPLIT, RAISES QUARTERLY
Financial Reports
LONDON MEAT FUTURES NEED MARKETING - CHAIRMAN
Pigmeat and beef futures, which have been thinly traded on the London Meat Futures Exchange, LMFE, despite lower physical prices and the introduction of new contracts, need more effective marketing, LMFE chairman Pat Elmer said in his annual report. In 1986 the Exchange introduced live cattle and pig cash settlement contracts, representing a move away from the problems of cash distortions and squeezes, which initial deliverable "buyers option" contracts created, he said. Although the physical industry is aware of the market and follows its prices keenly, this has not been reflected in market volume, Elmer said. "If we are to achieve our true potential the floor members must give the market much more time and attention," he added.
Financial Reports
INTERLINK SAYS NOT PLANNING BID FOR PUROLATOR
British package courier <Interlink Express Plc> does not plan to bid for the whole or part of Purolator Courier Corp <PCC.N>, a spokesman said. "There is no intention of making any sort of approach to Purolator," the spokesman told Reuters, adding, "it would be a case of David versus Goliath." Interlink shares started trading in the U.K. Unlisted Securities Market in October 1986. It posted pre-tax profits of 2.13 mln stg on turnover of 9.6 mln stg in the six months to December 31, 1986. Purolator last year topped turnover of 465 mln dollars, the spokesman said. between Purolator and Interlink in view of a takeover or participation. He categorically denied press reports suggesting Interlink was developing a buyout bid. The reports said the proposed bid would be a price above the 35 dlrs per share offered by <E.F. Hutton LBO Inc>. The Hutton offer expires tomorrow. The spokesman said Interlink was seeking to expand business, first in continental Europe and later in the U.S. But the company did not expect to gain foothold in the U.S. Market until 1989 at the earliest, he said.
Corporate News
SUPRADUR COS INC <SUPD> YEAR NET
Oper shr 1.58 dlrs vs 77 cts Oper net 1,648,000 vs 817,000 Sales 25.7 mln vs 20.5 mln NOTE: Net excludes discontinued operations gain 451,000 dlrs vs loss 4,310,000 dlrs.
Commodities and Trade
SOUTH KOREA TO RESIST CURRENCY REVALUATION
South Korean Finance Minister Chung In-yong will resist pressure for a currency revaluation to cut South Korea's trade surplus with the United States when he meets Treasury Secretary James Baker next week, Finance Ministry officials said. They said Chung would leave Monday to attend the International Monetary Fund's Interim Committee meeting and to hold talks with Baker and other U.S. officials on ways to reduce the surplus. The April 9 committee meeting is expected to review the agreement by six industrialized nations in Paris last month that newly-industrialized countries, such as South Korea and Taiwan, should allow their currencies to increase in value.
Corporate News
PENNEY <JCP> SETS STOCK SPLIT, RAISES QUARTERLY
J.C. Penney Co Inc said its board declared a two-for-one stock split and raised the quarterly dividend 12 cts per share on a presplit basis to 74 cts. Both are payable May One to holders of record April 10.
Commodities and Trade
HILLENBRAND INDUSTRIES INC <HB> 1ST QTR FEB 28
Shr 31 cts vs 28 cts Net 11.9 mln vs 10.9 mln Revs 167.2 mln vs 154.0 mln
Corporate News
U.K. MONEY MARKET GIVEN 215 MLN STG LATE HELP
The Bank of England said it had provided the money market with late assistance of around 215 mln stg. This takes the bank's total help today to some 2.096 billion stg and compares with its forecast of a two billion stg shortage in the system today.
Financial Reports
CABLE SAYS CONSORTIUM PROPOSALS NOT ACCEPTABLE
Cable and Wireless Plc <CAWL.L> said proposals to resolve a dispute over entry to Japan's telecommunications market were not acceptable. A company spokesman said the proposals appear to have been made in today's edition of the Japanese daily Asahi by Fumio Watanabe, head of a telecommunications committee with the Federation of Economic Organisations. However, the suggestion still recommended a merger between the two consortia tendering for contracts and would give Cable a five pct stake, more than the three pct originally proposed but less than the 20 pct it holds in its original venture, he said. The proposal would also offer a Cable nominee a seat on the board of the merged company. The spokesman said he believed Japan should accept applications from the two rivals for fair review. Earlier today Cable shares firmed on market speculation that the dispute -- which is being treated by Britain's government as a test case of how open the Japanese telecommunications market is -- was near settlement. Cable shares at 1350 GMT were quoted at 375p compared with a close last night at 364p.
Financial Reports
U.S./JAPAN TRADE WAR NOT IN UK'S INTEREST - LAWSON
U.K. Chancellor of the Exchequer Nigel Lawson said the United States and Japan must work to avert a possible trade war, and he added that a trade war would not be in the interests of Britain. Lawson told journalists that "the prospects for the (U.K.) economy look very very good - providing we can avoid a trade war." He stressed that "a heavy responsiblity in different ways lies on Japan and the United States to ensure that we do avoid such a trade war." Asked whether he believed such a trade war could be averted, Lawson replied, "I very much hope so." Britain last week warned that it would retaliate if Japan did not move soon to open its markets to outside competition. Prime Minister Margaret Thatcher gave notice that the U.K. Would fight the Japanese government's attempt to prevent (Cable and Wireless Plc) (CAWL.L) from taking a significant position in a new Japanese international telecommunications venture. But British officials are now trying to dampen anti-Japanese rhetoric, to try to keep developments under control. The British Conservative government will on Thursday consider what legal options are available to it to try to increase U.K. Access to Japanese markets, officials said.
Market and Economy
GAF CORP OFFERS 36 DLRS A SHARE CASH FOR BORG-WARNER
GAF CORP OFFERS 36 DLRS A SHARE CASH FOR BORG-WARNER
Commodities and Trade
ECONOMISTS CUT AUSTRIAN GDP GROWTH FORECAST
The Institute for Economic Research (WIFO) said it has cut its forecast for Austria's 1987 gross domestic product growth to a real one pct from a two pct forecast made last December. WIFO chief Helmut Kramer told a new conference that he saw the one pct figure, which compares with 1.8 pct last year, as the upper limit of growth. The institute had made the revision due to poor prospects for Austrian exports, he added. A collapse in sales to the Eastern European and oil producing states, combined with the effects of the dollar's fall, mean exports overall are unlikely to rise this year. Kramer said domestic demand alone would fuel growth this year. After last year's 2.8 pct rise in real incomes, private consumption was likely to rise 2.25 pct in 1987 after 1.9 pct in 1986, despite a present trend towards higher savings. Unemployment was likely to rise to almost six pct from 5.2 pct last year due to the slack economic activity. Kramer said the current account was likely to run a deficit of about four billion schillings compared with a 2.6 billion surplus recorded last year. The National Bank, Austria's central bank, last month forecast the current account would be roughly in balance this year. However, Kramer said the lower economic growth should have no notable effect on the government's attempts to cut the budget deficit. This year's aim of reducing the deficit to 4.9 pct of GDP from 5.1 pct in 1986 could still be achieved, he said.
Commodities and Trade
FERRUZZI MAY FLOAT UP TO 49 PCT OF PARIS UNIT
<Gruppo Ferruzzi> is studying a project which could result in a public share offer of up to 49 pct of its French unit <European Sugar (France)> and could raise around 400 mln dlrs, Ferruzzi chairman Raul Gardini said. Gardini told Reuters the operation under consideration was aimed at "international markets" and that the figure of 400 mln dlrs given in some press reports "was probably about right." European Sugar, wholly-owned by Ferruzzi unit Eridania Zuccherifici Nazionali SpA <ERDI.M>, is expected to absorb the European corn wet milling business of CPC International Inc <CPC.N> which Ferruzzi recently agreed to buy. Ferruzzi announced last week it had agreed in principle to buy the CPC operation for 630 mln dlrs. A Ferruzzi spokesman later confirmed that the group was studying the transfer of the CPC business to European Sugar along with a possible share offering in the Paris unit, but gave no details. The flotation plan has been interpreted by financial analysts as a means of helping finance the acquisition of the CPC business. In London yesterday, chairman of Belgian starch producer <Amylum NV> Pierre Callebaut told Reuters that since Ferruzzi was "apparently still organising finance," his company might still succeed with its rival bid for the CPC business. Gardini, commenting on Callebaut's remarks, said the 630 mln dlrs agreed for the CPC acquisition would be paid "at the date foreseen in the preliminary contract." Gardini could not reveal the date in question nor give any indication of the likely timing of an offering of shares in European Sugar, but it was announced last week that Ferruzzi's purchase of the CPC business was expected to be completed by September 30. Callebaut said yesterday that Amylum was surprised and disappointed that its 675 mln dlr bid cash offer for CPC's European business was apparently rejected in favour of Ferruzzi's lower bid. Gardini, commenting on Callebaut's remarks, said "Amylum should know that one succeeds in a bid by making the right offer at the right moment - exactly as Ferruzzi did in the case of the acquisition of CPC's European business." Gardini said it was not Callebaut's business to concern himself with the European Sugar capital raising operation under study, he added. Asked about press reports that Ferruzzi might follow up the European Sugar flotation with the sale of 49 pct of the CPC business, Gardini said: "We do not exclude having minority partners in the CPC business." He declined to elaborate.
Corporate News
CORRECTED - GAF CORP OFFERS 46 DLRS A SHARE CASH FOR BORG-WARNER (CORRECTING AMOUNT)
CORRECTED - GAF CORP OFFERS 46 DLRS A SHARE CASH FOR BORG-WARNER (CORRECTING AMOUNT)
Financial Reports
U.S. TREASURY'S BAKER SEES RATE STABILITY
Treasury Secretary James Baker said the agreement among the industrial countries reached in Paris last month should foster stability of exchange rates at around current levels. In testimony before the House Appropriations Committee, Baker outlined many of the measures taken designed to achieve more balanced growth and a reduction of trade imbalances during the Paris meeting. "These measures should also foster greater stability of exchange rates around current levels," he said. Baker reiterated that the ministers at the Paris meeting agreed that their currencies were within ranges "broadly consistent with underlying economic fundamentals and that further substantial exchange rate shifts could damage growth and adjustment prospects." He added: "In these circumstances, we agreed to cooperate closely to foster stability of exchange rates around current levels."
Corporate News
GAF <GAF> SEEKS ALL OF BORG-WARNER <BOR>
GAF Corp said it has made an all cash merger proposal to Borg-Warner Corp at 46 dlrs per share for all the company's common stock. Following a meeting yesterday with Borg-Warner officials and investment bankers, GAF said, it is today delivering a letter to the Borg-Warner board outling the terms of the proposal that would be made by tender offer, pursuant to a mutually acceptable merger agreement to be approved by the Borg-Warner board and conditioned on that board's recommendation of the tender offer and merger. GAF, in its letter, stated it intends to finance the proposed acquisition entirely with its own funds and bank borrowings under a syndicated bank loan from a group of banks led by Chase Manhattan Corp's <CMB> Chase Manhattan Bank. Last week, GAF increased its ownership of Borg-Warner shares to 19.9 pct of those outstanding Minstar Inc <MNST> sold its 12.4 pct holding. GAF emphasized "the amicable nature of the proposed transaction," which it characterized as a partnership. GAF said it wanted to discuss with the Borg-Warner board key roles for Borg-Warner's senior management in the new organization, board representation for Borg-Warner directors on a newly constituted board, and a company name change. GAF said it will be filing an amendment to its 13-D with the U.S. Securities and Exchange Commission. Borg-Warner has about 85.6 mln common shares outstanding. Minstar chairman Irwin L. Jacobs sold his stake after Borg-Warner after the company failed to respond to his mid-February offer for a negotiated agreement at a minimum price of 44 dlrs a share. In November, Jacobs had offered to enter into acquisition talks with Borg-Warner based on a price of between 43 and 48 dlrs a share.
Commodities and Trade
LIBERTY ALL-STAR <USA> SETS INITIAL PAYOUT
Liberty All-Star Equity Fund said it declared an initial dividend of five cts per share, payable April two to shareholders of record March 20. It said the dividend includes a quarterly dividend of three cts a share and a special payout of two cts a share, which covers the period from November three, 1986, when the fund began operations, to December 31, 1986. The fund said its quarterly dividend rate may fluctuate in the future.
Financial Reports
<TRANS CANADA GLASS LTD> 4TH QTR LOSS
Shr loss 11 cts vs loss eight cts Net loss 500,000 vs loss 500,000 Sales 47.4 mln vs 37.5 mln Year Shr profit 70 cts vs profit 89 cts Net profit 4.4 mln vs profit 5.3 mln Sales 195.5 mln vs 148.3 mln
Financial Reports
GEOTHERMAL RESOURCES INTERNATIONAL INC <GEO>
Year Oper shr 1.23 dlrs vs 1.85 dlrs Oper shr diluted 1.23 dlrs vs 1.79 dlrs Oper net 6,799,000 vs 9,321,000 Revs 7,474,000 vs 12.4 mln Avg shrs 4,503,000 vs 4,350,000 Avg shrs diluted 4,508,000 vs 5,206,000 NOTE: Net excludes gains from discontinued operations of 386,000 dlrs vs 903,000 dlrs. 1986 year net excludes gain 1,910,000 dlrs from sale of discontinued operations. Net includes tax credits of 9,450,000 dlrs vs 11.9 mln dlrs.
Other
FIRST CITY INDUSTRIES INC <FCY> 4TH QTR NET
Opoer shr profit 17 cts vs loss 96 cts Oper net profit 2,293,000 vs loss 7,110,000 Sales 116.0 mln vs 108.3 mln Year Oper shr loss 2.03 dlrs vs loss 2.12 dlrs Oper net loss 13.8 mln vs loss 11.6 mln Sales 454.0 mln vs 446.4 mln NOTE: Net excludes gains from discontinued operations of 10.2 mln dlrs vs 1,985,000 dlrs in quarter and 4,262,000 dlrs vs 1,320,000 dlrs in year.
Commodities and Trade
MAGELLAN PETROLEUM CORP <MPET> 3RD QTR JAN 31
Shr loss nil vs profit nil Net loss 90,656 vs profit 892 Revs 2,194,242 vs 2,481,784 Avg shrs 19.5 mln vs 16.1 mln Nine mths Shr profit nil vs loss one ct Net profit 42,824 vs loss 149,150 Revs 6,364,992 vs 6,503,811 Avg shrs 19.5 mln vs 16.1 mln NOTE: Net includes tax credits of 98,338 dlrs vs 81,492 dlrs in quartrer and 193,193 dlrs vs 226,560 dlrs in nine mths.
Other
TERRA MINES LTD <TMEXF> YEAR LOSS
Shr loss 89 cts vs loss 17 cts Net loss 13.9 mln vs loss 1,996,000 Revs 204,000 vs 2,087,000 Note: 1986 includes writedown of 12.5 mln dlrs for the costs of mineral properties and deferred exploration and development Bullmoose Lake in the Northwest Territories.
Financial Reports
MERRILL CORP <MRLL> 4TH QTR JAN 31 NET
Shr 17 cts vs 17 cts Net 777,000 vs 595,000 Revs 12.9 mln vs 11.7 mln Year Shr 68 cts vs 48 cts Net 2,957,000 vs 1,614,000 Revs 49.4 mln vs 38.6 mln Avg shrs 4,344,204 vs 3,337,284
Corporate News
D.O.C. OPTICS CORP <DOCO> 4TH QTR LOSS
Shr loss 11 cts vs profit 12 cts Net loss 286,817 vs profit 292,014 Revs 9,972,379 vs 9,413,304 Year Shr profit 63 cts vs profit 57 cts Net profit 1,547,893 vs profit 1,481,703 Revs 43.9 mln vs 41.0 mln Avg shrs 2,474,820 vs 2,617,768
Commodities and Trade
U.S. SETS CORN DEFICIENCY PAYMENT HALF PIK CERTS
The upcoming five-month deficiency payments to corn and sorghum farmers will be made half in cash and half in generic commodity certificates, a senior Agriculture Department official told Reuters. Around 300 mln dlrs of the in-kind certificates, or "certs," will be mailed out to farmers around March 15 or 16, Tom von Garlem, Assistant Deputy Administrator for USDA's state and county operations, said. The decision to make the payments in a 50/50 cash/certs ratio was made Monday, but payments to producers will be delayed until mid-month due to a problem with USDA's computer program, von Garlem said. get 11.5 cts per bushel in this next payment -- 5.75 cts in certs and around 5.5 cts cash (5.75 cts minus Gramm-Rudman). Farmers who did not receive advance deficiency payments at signup will receive 63 cts per bushel. Slightly more than half of this payment will be in cash, von Garlem said, but he said this will not markedly upset the 50/50 ratio, since most farmers got advance payments. "The final certificate payments will be very close to 300 mln dlrs," he said. When asked if the Office of Management and Budget had resisted the cash/certs ratio, the USDA official said that "we proposed 50/50 and OMB accepted it."
Corporate News
U.S. TREASURY'S BAKER SEES EXPANSION CONTINUING
Treasury Secretary James Baker said that the current expansion, which he noted was in its fifth year, will continue in the period ahead. He told the House Appropriations Committee that "there is every prospect that the current expansion will continue unabated through 1987 and the years beyond." Baker said interest rates over the period have continued to decline and that "policies of the Federal Reserve assure that ample credit was available. He said that the administration's longer term forecast envisioned that "we will maintain and improve upon our progress in bringing down the rate of inflation."
Corporate News
EC APPROVES MEDITERRANEAN FINANCIAL PACKAGES
EC ministers have approved financial packages for several Mediterranean states totalling 1.6 billion European currency units, an EC official said. The packages, part of special EC trade agreements with Tunisia, Egypt, Lebanon, Israel, Algeria, Morocco and Jordan until 1992, include 615 mln Ecus in grants, he said. They include one billion Ecus in loans from the European Investment Bank, the EC long-term financing arm. The framework for the transfers was signed yesterday by EC farm ministers after being agreed in principle by foreign ministers earlier.
Commodities and Trade
SOVIET UNION FEATURES IN U.K. GRAIN EXPORTS
The Soviet Union featured prominently in U.K. Grain exports outside the EC for the period July 1/March 13, taking a combined total of 1.10 mln tonnes of wheat and barley out of all-destination U.K. Exports of 7.16 mln tonnes, the Home Grown Cereals Authority said, quoting provisional Customs and Excise figures. The Soviet total comprises 634,000 tonnes of wheat and 472,000 tonnes of barley. Grain traders said the figures understate shipments already made by several thousand tonnes and they expect total U.K. Grain exports to the USSR this season to reach 2.5 mln tonnes, comprising 1.5 mln wheat/1.0 mln barley.
Financial Reports
SOUTHERN HOSPITALITY CORP <SHOS> 3RD QTR FEB 28
Shr loss 23 cts vs loss 11 cts Net loss 1,128,412 vs loss 548,054 Sales 9,827,784 vs 12.1 mln Nine mths Shr loss 19 cts vs profit 11 cts Net loss 926,924 vs profit 527,004 Sales 32.3 mln vs 37.5 mln
Corporate News
ELDER-BEERMAN STORES CORP <ELDR> 4TH QTR FEB ONE
Oper shr 89 cts vs 1.31 dlrs Oper net 3,345,000 vs 4,885,000 Sales 126.8 mln vs 120.1 mln Year Oper shr 1.67 dlrs vs 2.15 dlrs Oper net 6,299,000 vs 8,013,000 Sales 380.9 mln vs 352.1 mln NOTE: Share adjusted for five pct stock dividend. Prior year net both periods excludes gain 1,998,000 dlrs from reversion of overfunded pension plans. Year net includes pretax LIFO inventory charge 600,000 dlrs vs credit 900,000 dlrs.*Tax rate 40.6 pct vs 32.0 pct due to impact of Tax Reform Act of 1986. Bad debt writeoffs for year up one mln dlrs pretax from the year before.
Financial Reports
TREASURY'S BAKER SAYS COOPERATION WORKING
Treasury Secretary James Baker said that the agreement in Paris to cooperate in exchange rate changes showed that the process of coordination agreed to at the Tokyo summit was working. He told the House Appropriations Committee the meeting "demonstrated that the process is working." He noted that the industrial surplus countries committed themselves to strengthen their growth prospects while the deficit countries agreed to reduce their domestic imbalances. Baker said that for its part, Japan announced a cut in its discount rate to 2.5 pct and committed itself to prepare a comprehensive economic program to stimulate domestic demand after the Diet completes action on the current budget. He said the United States must also do its share pressing for reductions in the federal budget deficit through spending cuts. "And we must continue to oppose protectionist pressures," he added.
Financial Reports
AKZO PLANNING US INVESTMENTS
Dutch chemicals group Akzo NV <AKZO.AS> said it hoped to consolidate its core activities this year by making small acquisitions in the US. Akzo chairman Aarnoud Loudon told a news conference on its 1986 report that the company wanted to achieve the same level of US investments it had before it divested its fibre firm American Enka in December 1985, when US investments represented 20 pct of Akzo's total capital. The US expansion plans were not an attempt to compensate for losses in guilder income through the lower dollar, Loudon said. He said a more important factor was the speed of growth in the US, adding "It's the largest industrial market in the world." But he said the company would also be looking at possible acquisitions in Europe. Despite its highly liquid cash flow, Akzo did not plan acquisitions on a scale that would negatively influence the company's debt/equity ratio, Loudon said. The chairman said in the past two years Akzo had spent 1.1 billion guilders on acquisitions, of which nearly two thirds were in the United States. REUTER...
Commodities and Trade
OECD SEES MAJOR ADJUSTMENT FOR AUSTRALIA
Australia faces a major medium term adjustment to reduce debt and improve its economic performance, the Organisation for Economic Cooperation and Development said in its latest annual review of the Australian economy. It said Australia had a current external deficit of 5-3/4 pct of gross domestic product, high and rapidly rising external debt equal to 30 pct of GDP, growing servicing costs and inflation above nine pct, far higher than that of other OECD countries. A major policy change in early 1985 helped lay the basis for sustained non-inflationary growth and external competitiveness had improved, but economic performance overall had sharply deteriorated since June 1985. A major shift of real resources to the external sector -- about 4-1/2 pct of GDP by 1990-91 -- was required for the economy to expand in line with potential, for employment to grow, and for the debt/GDP ratio to stabilize, it said. Success depended on the setting of right policies including tighter fiscal policy, a reduction in the public sector borrowing requirement and on private sector behaviour. Looking ahead over the next 18 months, the OECD expected economic performance to improve, partly as a result of tighter fiscal and monetary policy, and a substantial improvement in trade volumes. It said positive GDP growth of three pct might be restored, the current external deficit could fall to some 4-1/2 pct of GDP by the first half of next year, while inflation was projected to decelerate to around five to 5-1/2 pct by mid-1988. Continued real wage moderation was essential to maintain the competitive edge created by the Australian dollar's depreciation, and to maintain if not boost profit shares in order to encourage business investment. The report urged Australia to broaden its export base by developing viable and competitive service and manufacturing industries, and not count on a recovery of commodity markets to correct its external imbalances. It added Australia should reduce protection levels in manufacturing, even though faster trade liberalisation would no doubt hurt the most protected sectors of industry.
Financial Reports
U.S. SUGARBEET PLANTINGS SEEN RISING IN 1987
Representatives of U.S. sugar grower organizations said they expect some increase the area planted to sugarbeets this year and said the prospects for the 1987 cane sugar crop also are good. Dave Carter, president of the U.S. beet sugar association, said plantings may be up in two major beet growing states, California and Michigan, while sowings could be down slightly in the largest producing state of Minnesota. Overall, Carter predicted beet plantings would rise in the midwest, and this coupled with increases in California would increase U.S. sugarbeet plantings slightly from the 1.232 mln acres sown last year. USDA later today releases its first estimate of 1987 U.S. sugarbeet plantings in the prospective plantings report. The main reason for the expected increase in beet sowings is that returns from competing crops such as soybeans and grains are "just awful," said Carter. In the midwest, bankers are strongly encouraging farmers to plant sugarbeets because the U.S. sugar program offers a loan rate of 18 cents per pound and because payments to farmers from beet processors are spread evenly over the growing season, said Luther Markwart, executive vice president of the American sugarbeet growers association. "The banks are putting a lot of pressure on these guys," Markwart said. In some areas there are waiting lists of farmers seeking a contract with processors to plant beets, Markwart said. USDA's report today will not include any harvested area estimates for sugarcane, but representatives of Florida, Hawaii and Louisiana growers said crop prospects are good. Horis Godfrey, a consultant representing Florida and Texas cane growers, said Florida cane is off to a good start because for the first time in several years there was no winter freeze. Although area to be harvesteed is about the same as last year, cane production may be up in Florida this year, he said. In Hawaii, area harvested may decline slightly this year, but likely will be offset again in 1987 by increased yields, said Eiler Ravnholt, vice president of the Hawaiian Sugar Planters Association. The acreage planted to sugarbeets will receive more than the usual amount of attention this year because of mounting concern that continued increases in domestic sugar production threaten the U.S. sugar program, industry sources said. The increases in beet plantings have especially caused concern among cane growers who have not expanded plantings, particularly in Hawaii, industry officials said. "We haven't had a good weather year throughout the beet and cane areas in more than five years," said Godfrey, adding that the U.S. may be due for a good weather year. Rep. Jerry Huckaby, D-La., chairman of the House agriculture subcommittee responsible for the sugar program, has threatened to offer legislation next year to curb domestic sweetener output if growers fail to restrain output in 1987.
Financial Reports
HECK'S INC <HEX> 4TH QTR JAN THREE NET
Shr losses not given Net loss 7,800,000 vs loss 5,400,000 Sales 181.2 mln vs 182.0 mln Year Shr losses not given Net loss 17.8 mln vs loss 4,900,000 Sales 566.3 mln vs 523.3 mln NOTE: Company operating in Chapter 11 bankruptcy. 1986 year net includes four mln dlr LIFO charge and 3,400,000 dlr credit from pension plan termination.
Financial Reports
CAPITAL BANCORP <CAPB> SEES GAIN ON UNIT SALE
Capitol Bancorp said it has sold its 80 pct interest in CAP Mortgage Co Inc for 3.1 mln dlrs, adding this is expected to result in an after tax gain of about 900,000 dlrs to be reported in the first quarter. Capitol Bancorp said the CAP Mortgage interest was sold to Michael M. Bronstein, president of CAP Mortgage, and Robert Fox, president of Fox Properties Inc. Bronstein already held the other 20 pct of CAP Mortgage's stock.
Financial Reports
4G DATA SYSTEMS <GGGG> 3RD QTR NET
qtr ends Jan 31 Shr nil vs nil Net 2,213 vs 16,288 Revs 1,418,019 vs 795,522 Avg shrs 6,650,000 vs 4,150,000 Nine mths Shr two cts vs three cts Net 118,984 vs 103,384 Revs 4,066,605 vs 2,741,241 Avg shrs 6,650,000 vs 3,969,444
Corporate News
<NIKI-LU INDUSTRIES INC> YEAR NET
Oper shr profit 18 cts vs loss 38 cts Oper net profit 577,000 vs loss 1,147,000 Revs 16.3 mln vs 19.8 mln Avg shrs 3,227,625 vs 3,057,206 NOTE: 1986 net excludes 485,000 dlr tax credit.
Financial Reports
WALLACE COMPUTER SERVICES INC <WCS> 2ND QTR NET
Shr 69 cts vs 64 cts Net 7,046,000 vs 6,492,000 Sales 85.7 mln vs 79.6 mln Six Mths Shr 1.28 dlrs vs 1.19 dlrs Net 13,098,000 vs 12,006,000 Sales 166.3 mln vs 153.3 mln NOTE: Periods end January 31, 1987 and 1986, respectively.
Financial Reports
COLOROCS CORP <CLRX> YEAR LOSS
Shr loss 28 cts vs loss 29 cts Net loss 2,086,477 vs loss 1,466,907 Revs 218,864 vs 60,000 Avg shrs 7,510,781 vs 4,990,168
Commodities and Trade
CSCE RESTRUCTURES COFFEE FUTURES DAILY LIMITS
The Coffee, Sugar and Cocoa Exchange has expanded the normal daily trading limit in Coffee "C" contracts to 6.0 cents a lb, from the previous 4.0 cents, effective today, the CSCE said. The new daily limits apply to all but the two nearby positions, currently May and July, which trade without limits. In addition, the 6.0 cent limit can be increased to 9.0 cents a lb if the first two limited months both make limit moves in the same direction for two consecutive sessions, according to the CSCE announcement. Before the rule change today, the CSCE required two days of limit moves in the first three restricted contracts before expanding the daily trading limit. Under new guidelines, if the first two restricted deliveries move the 6.0 cent limit for two days the Exchange will expand the limit. The expanded 9.0 cent limit will remain in effect until the settling prices on both of the first two limited months has not moved by more than the normal 6.0 cent limit for other contracts in two successive trading sessions, the CSCE said.
Financial Reports
KANSAS EXCHANGE HITS CFTC POSITION LIMIT PLAN
The Kansas City Board of Trade, KCBT, has asked federal futures regulators to modify a proposal to raise the Chicago Board of Trade's, CBT, speculative position limits on wheat futures contracts, saying the plan would put the the Kansas exchange "at a serious competitive disadvantage." The Commodity Futures Trading Commission, CFTC, last month proposed raising CBT wheat speculative limits to 1,200 contracts all months net from 600 contracts, and to 900 contracts for any single month from 600 contracts. At the same time, CFTC proposed leaving KCBT's wheat speculative position limits unchanged. "Higher limits for CBT wheat than for KCBT wheat would significantly impair the KCBT's ability to compete with the CBT for speculative interest," Michael Braude, president of the Kansas exchange, said in a letter to CFTC. A CFTC spokesman said the commission took into account open interest affected by existing speculative limits in proposing to raise CBT's limits. KCBT said the CFTC proposal would reduce hedging efficiency, constrain growth of intermarket spreading and of the exchange's wheat options contract and impair its ability to attract large speculators. The Kansas City exchange asked the commission to amend its proposal to change the limits for KCBT wheat to the exact same bushel amount as specified for CBT wheat. CFTC will consider public comments on the proposal until June 3.
Financial Reports
FERRUZZI MAY FLOAT UP TO 49 PCT OF PARIS UNIT
Gruppo Ferruzzi is studying a project which could result in a public share offer of up to 49 pct of its French unit European Sugar (France) and could raise around 400 mln dlrs, Ferruzzi chairman Raul Gardini said. Gardini told Reuters the operation under consideration was aimed at "international markets" and that the figure of 400 mln dlrs given in some press reports "was probably about right." European Sugar, wholly-owned by Ferruzzi unit Eridania Zuccherifici Nazionali SpA, is expected to absorb the European corn wet milling business of CPC International Inc which Ferruzzi recently agreed to buy. Ferruzzi announced last week it had agreed in principle to buy the CPC operation for 630 mln dlrs. A Ferruzzi spokesman later confirmed that the group was studying the transfer of the CPC business to European Sugar along with a possible share offering in the Paris unit, but gave no details. The flotation plan has been interpreted by financial analysts as a means of helping finance the acquisition of the CPC business.
Market and Economy
GANDALF <GANDF> ACQUIRES STAKE IN DATA/VOICE
Gandalf Technologies Inc said it acquired a significant minority equity interest in privately held Data/Voice Solutions Corp, of Newport Beach, Calif., for undisclosed terms. Gandalf did not specify the size of the interest. Data/Voice is a three-year-old designer and manufacturer of a multiprocessor, multiuser MS-DOS computing system that Gandalf plans to integrate with its private automatic computer exchange information system, Gandalf said.
Financial Reports
KEYCORP <KEY> AGREES TO ACQUIRE UTAH BANK
Keycorp said it has signed a definitive agreement to acquire Commercial Security Bancorp <CSEC> by exchanging Keycorp common valued at 63 dlrs for each Commercial Securities share. Keycorp said this gives the transaction an indicated value of 102 mln dlrs. Keycorp said the amount of its stock to be exchanged will be based on the daily average closing price of the shares for an unspecified period prior to the closing of the acquisition. Based on a maximum of about 2.75 Keycorp shares and a minimum of about 1.8 Keycorp to be exchanged, the agreement provides that if the average price of Keycorp common is less than 21.50 dlrs a share during the pricing period, the agreement will terminate unless a new conversion ratio can be negotiated. Keycorp said the transaction is designed to be tax free to Commercial Security shareholders. The company said it will treat the merger as a pooling of interests. It said the proposal is subject to approval by Commercial Security shareholders and various regulators. Keycorp said the merger is expected to become effective as soon as possible after December 31, 1987, the date Utah's interstate banking law becomes operational. Keycorp said Richard K. Hemingway and certain members of the Hemingway family who own about 30 pct of Commercial Security's outstanding shares have agreed to vote in favor of the transaction and not dispose of their stock. Based in Salt Lake City, Commercial Security ended 1986 with assets of 830.3 mln dlrs, net loans of 496.6 mln dlrs and deposits of 707.9 mln dlrs. It had net income of 5.1 mln dlrs or 3.16 dlrs a share on 1.6 mln average shares outstanding last year.
Financial Reports
AMERICAN VANGUARD CORP <AMGD> YEAR NET
Shr 57 cts vs 27 cts Net 1,002,000 vs 470,000 Sales 15.9 mln vs 12.0 mln Note: 4th qtr data not available
Corporate News
EXXON <XON> OIL AND GAS PRODUCTION ROSE IN 1986
Exxon Corp said in its annual report that it raised production in 1986 although it did not replace all oil and gas produced. The company said that it added about four pct to production bringing it to 1.8 mln bpd, the highest level since 1979, based largely on increased production of oil overseas but additions to its reserves from new discoveries and reserve acquisitions did not replace all of the oil and gas produced. The company said that the average price for oil and gas declined 41 pct in 1986 from the previous year sparking a 38 pct decline in its earnings from exploration and production. Exxon's earnings from exploration and production in 1986 fell to 3.1 billion dlrs from 4.9 billion dlrs in 1985. Exxon said that its principal gains in production came from the Gulf of Mexico, Alaska, the North Sea, Malaysia and from oil sands in Canada. Exxon also said that it acquired 11.2 mln acres for expoloration spread over 10 countries including the U.S, Europe and the Far East. But capital expenditures for exploration and production were cut to 4.6 billion dlrs from 7.6 billion the previous year and further reductions were expected in 1987. Exxon said that its net share of crude oil and natural gas liquids produced from offshore fields in the North Sea reached a new high of 422,000 bpd. The light, sweet crudes produced from these North Sea fields also gave the company trading gains as Exxon was able to sell much of this crude and replace it with cheaper, lower quality crude oil for its refineries which have been upgraded over the past several years. The trading gains and lower acquisition costs gave Exxon more of a spread in its refinery operations and added to earnings gains from refining and marketing. Exxon said earnings from refining and marketing operations rose to nearly two billion dlrs in 1986, up from 872 mln dlrs in 1985. The company said petroleum sales slipped slightly to 4.043 mln barrels per day from 4.082 mln bpd in 1985 while crude runs rose to 3.0 mln bpd from 2.9 mln bpd the previous year. Exxon's refinery operations benefited from a three year 500 mln dlr upgrading program to its Baytown, Texas refinery completed last October and an 850 mln dlr upgrading project in Rotterdam both of which emphasize utilizing lower grade crudes to extract higher proportions of light products.
Other
SOVIET UNION SEEN WATCHING CHINA GATT APPLICATION
China's application to join the General Agreement on Tariffs and Trade (GATT) is seen as a test case by the Soviet Union, which will probably demand to follow China, a top European Community official said. Willy de Clercq, External Relations Commissioner of the European Communities, told a news conference that China's application would involve long and difficult negotiations. China formally applied to join GATT in July 1986 and in February presented a memorandum backing its application, which De Clercq said was now being studied. Questions would then be presented to China. "After China, other important state-trading countries including the Soviet Union, will probably demand accession. China's application could be considered a test case," he said. He said the EC strongly backed China's application, but others among GATT's 92 contracting parties took a tougher line. Among the numerous problems of a huge centrally-run economy entering a free trade system are tariffs and reciprocity and the expectation that China will practice an open-trade policy without trade discrimination, de Clercq added. De Clercq noted the different dimensions of the Chinese economy and those of Hungary and Yugoslavia, the two current Socialist GATT members. On China's import potential, he said a foreign exchange shortage would force China to import less this year and next than in the past, with an emphasis on technological equipment and capital. During his visit, De Clercq has met top Chinese leaders and today signed an agreement to open a European Community Commission office in Peking.
Other
ROCKY MOUNT UNDERGARMENT <RMUC> 4TH QTR LOSS
Shr loss 53 cts vs loss 32 cts Net loss 1,548,000 vs loss 929,000 Revs 9,362,000 vs 11.3 mln 12 mths Shr loss 82 cts vs profit 17 cts Net loss 2,408,000 vs profit 452,000 Revs 40.9 mln vs 39.5 mln NOTE: full name of company is Rocky Mount Undergarment Co Inc.
Corporate News
U.S. COMMERCE SECRETARY SEES HIGHER GNP GROWTH
Commerce Secretary Malcolm Baldrige said a 0.7 pct rise in February's index of leading indicators pointed to stronger economic growth in the first half of 1987. In a statement commenting on the rise last month after a 0.5 pct January decline, Baldrige noted the leading index was rising at an 8.0 pct annual rate in the six months to the end of February. "Based on past relationships, that gain is consistent with stepped up growth in real GNP during the first half of 1987," Baldrige said.
Corporate News
U.S. SENATE LEADERS SEE NO TRADE WAR BREWING
The Senate's Democratic and Republican leaders praised President Reagan for retaliating against Japan for violating a semiconducter accord but dashed cold water on ideas it was the first shot in a trade war. Senate Democratic Leader Robert Byrd and Republican leader Bob Dole both told the Senate Reagan's decision was long overdue and urged Japan to open its markets to U.S. goods and stop dumping on world markets. Each noted in separate speeches that they saw no trade war over the issue, despite concerns in financial markets. "That fear has no basis in fact," Byrd said.
Corporate News
DYR LIQUIDATING <DYR> SETS LIQUIDATING PAYOUT
DYR Liquidating Corp, formerly Dyneer Corp, said its board declared a third liquidating dividend of one dlr per share payable to shareholders of record on April 14 and said it will file a certificate of dissolution on that date. The company said shareholders of record on that date will acquire beneficial interests in the liquidating trust that will be formed to hold all of the company's assets. It said it has asked the American Stock Exchange to suspend trading in its common stock at the close on April 6 to ensure settlement of all traded by April 14. DYR said it expects its stock to be withdrawn from registration under the Securities Exchange Act of 1934 shortly after April 14. DYR said the pay date for the dividend will be April 28.
Corporate News
NETWORK SECURITY CORP <NTWK> YEAR NET
Shr 1.24 dlrs vs 19 cts Shr diluted 1.11 dlrs vs 19 cts Net 11.9 mln vs 1,830,000 Revs 79.3 mln vs 46.1 mln NOTE: 1986 net includes pretax charge 8,300,000 dlrs from increases and reserves and writeoffs of low-yielding assets and pretax gain 20.8 mln dlrs from sale of Multi-Family subsidiary. Another 3,800,000 dlrs of gain from the Multi-Family sale will be recognized in 1987 if Multi-Family meets targeted operating results.
Commodities and Trade
PEAT MARWICK, KMG MAIN HURDMAN TO COMPLETE MERGER
Peat Marwick and KMG Main Hurdman said their merger will be completed tomorrow. The new firm, to be known as KPMG Peat Marwick, will rank among the largest public account and consulting firms in the U.S. based on combined 1986 revenues of 1.35 billion dlrs, 1,825 partners and a total staff of 16,500 in 136 offices. KPMG was created as part of the merger announced last September of Peat Marwick International Klynveld Main Goerdeler to form Klynveld Peat Marwick Goerdeler.
Market and Economy
DUTCH MONEY MARKET DEBT EASES IN WEEK
Loans and advances from the Dutch Central Bank to the commercial banks fell 1.01 billion guilders to 9.5 billion guilders in the week ending March 30, the Bank's weekly return showed. Dealers said payments by the Dutch state, partly in the form of civil service wages, had outweighed payments to the State, causing the money market deficit to ease. The Treasury's account with the Bank dropped 960 mln guilders to 6.5 billion guilders. Liabilities in gold or foreign currency rose 200 mln to 11.9 billion guilders. Dealers said it was more likely that the alteration in this item on the weekly return indicated normal commercial foreign exchange business rather than intervention by the Central Bank. The Bank itself does not disclose information on intervention. Seasonal variation brought bank notes in circulation up 190 mln guilders to 29.7 billion guilders. Total gold and currency reserves rose 173 mln guilders to 56.4 billion guilders. Call money and period rates were barely changed in the week. Today all were traded at 5-3/8 to 5-1/2 pct.
Corporate News
BORG-WARNER <BOR> EXAMINING GAF <GAF> PROPOSAL
Borg-Warner Corp in a statement said it has received GAF Corp's 46 dlrs a share acquisition proposal and will have no comment until its board of directors has had a chance to examine it thoroughly.
Financial Reports
NORTH AMERICAN BIOLOGICALS INC <NBIO> 4TH QTR
Oper shr one ct vs three cts Oper net 99,000 vs 327,000 Revs 12.1 mln vs 8,800,000 Avg shrs 15.5 mln vs 11.3 mln Year Oper shr six cts vs 11 cts Oper net 841,000 vs 956,000 Revs 44.1 mln vs 34.4 mln Avg shrs 15.3 mln vs 8,519,677 NOTE: Net excludes tax credits of 299,000 dlrs vs 29,00000 dlrs in quarter and 809,000 dlrs vs 71,000 dlrs in year.
Corporate News
CRI INSURED II <CII> ESTIMATES DIVIDENDS
CRI Insured Mortgage Investments II Inc said it expects to distribute about 1.55 to 1.65 dlrs per share from operations for all of 1987 and about 1.68 to 1.75 dlrs including the proceeds of the gain from the sale of the Brighton Meadows mortgage through January 31. The company today paid a dividend of 1.1646 dlrs per share. Its first two quarterly payments, in September and December, were 42.5 cts each. CRI said it has not yet declared a distribution on the Park Meadows loan disposition.
Corporate News
LME LISTS BRAZILIAN ALUMINIUM BRAND
The London Metal Exchange (LME) has listed the aluminium brand "CBA' produced by Cia Brasileira de Aluminio at its Mairinque, Sao Paulo, plant. The brand will constitute good delivery from April 1, the LME said.
Market and Economy
GUATEMALA TO HOST OTHER MILDS COFFEE MEETING
Guatemala will host a meeting of other milds coffee producers probably in May to discuss basic export quotas, the Guatemalan delegate to the International Coffee Organization, ICO, said. No firm date has been set for the talks, Ambassador Rene Montes told reporters at the ICO executive board meeting here. Producer countries Brazil, Colombia, and a member of OAMCAF, the African and Malagasy Coffee Organization, may also be invited for consultation, he said. ICO producers and consumers could not agree on how to calculate export quota shares at a recent council meeting here. Other milds coffee producers include Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, India, Mexico, Nicaragua, Papua New Guinea, and Peru.
Other
AUDIO/VIDEO <AVA> TO GET EXPENSES FROM DIXONS
Audio/Video Affiliates Inc said it will receive an undisclosed amount from <Dixons Group PLC> in connection with the termination of Cyacq Corp's 92.50 dlr per share tender offer for Cyclops Corp <CYL>. The company said the amount from Dixons is in lieu of reimbursement expenses for the Cyacq tender. Citicorp <CCI> was the other partner in Cyacq. The payment was in connection with Dixons' previously -announced agreement to increase its tender price for Cyclops to 95.00 dlrs per share, Cycacq's ending of its competing bid and the ending of litigation between the parties.
Financial Reports
REPUBLIC <RSLA> TO MERGE WITH PIONEER SAVINGS
Republic Savings and Loan Association and <Pioneer Savings> of Racine, Wis., said they have signed a definitive agreement to combine the two associations into a publicly held holding company to be called Republic Capital Group Inc. The associations said they would form the company by exchanging Republic's stock for shares in the holding company, which Pioneer savers could purchase when Pioneer converts from mutual to stock ownership. The associations added that they would remain independent, but wholly owned, units of the holding company. The associations said they would continue to do business using their present names and management. The combination of Republic's 459 mln dlrs in assets with Pioneer's 125 mln dlrs would make the new holding company the fifth largest savings and loan organization in Wisconsin, they said. The associations said the move is subject to approval by the Federal Home Loan Bank Board and the Wisconsin Commissioner of Savings and Loan, as well as Republic's shareholders and Pioneer's depositors.
Corporate News
<NEW HARDING GROUP INC> 1ST QTR JAN 31 NET
Shr 19 cts Net 653,000 Revs 45.6 mln Note: Prior results not given due to November, 1986 acquisition of 56 pct stake in Continuous Colour Coat Ltd
Commodities and Trade
BROUGHER <BIGI> TO SELL 40 PCT OF SUBSIDIARY
Brougher Insurance Group Inc said it plans to sell 40 pct of the stock of its subsidiary, Intercontinental Corp, for one mln dlrs to three European insurance companies. The parent company said it signed a letter of intent to sell the stock to <WASA Europeiska Forsakrings AB> of Sweden, <Europeiske Reiseforsikring A/S> of Norway, and <Europeiska Rejseforsikrings A/S> of Denmark. Brougher said it expects to realize a net after-tax gain of approximately 330,000 dlrs, or 12 cts per share, from issuing stock of Intercontinental.
Financial Reports
CANADA INDUSTRY PRICES FALL 0.2 PCT IN MONTH
The Canadian industrial product price index, base 1981, fell 0.2 pct in February after rising 0.2 pct in January, Statistics Canada said. "A significant part of this monthly decrease was attributable to the impact of the increase of the Canadian dollar on prices for wood pulps, newspaper, aluminum, nickel and motor vehicles," the federal agency said. On a year-over-year basis, the index was down 0.8 pct, little change from the 0.9 pct decline posted in January.
Financial Reports
OMNICOM GROUP INC <OMCM> 4TH QTR NET
Shr profit 27 cts vs profit 51 cts Net profit 6,600,000 vs profit 12,231,000 Revs 211.7 mln vs 193.4 mln 12 mths Shr loss 17 cts vs profit 1.27 dlrs Net loss 4,077,000 vs profit 30,142,000 Revs 753.5 mln vs 673.4 mln NOTE: in qtr ended 1986 the company recognized expenses of 5,948,000 for restructing the combined operations of BBDO, Doyle Dane Bernbach and Needham Harper Worldwide in August 1986 before tax gains. These relate primarily to the conosolidation and elimination of duplicate facilities and staff. for the year 1986, the provisions for mergers and restructuring expenses brought non-recurring expenses to 40,292,000 before tax gains, of which 8,863,000 represented merger costs and 31,429,000 related to restructuring of the combine operations.
Commodities and Trade
KANSAS LEGISLATOR PREDICTS EEP WHEAT TO SOVIETS
Rep. Pat Roberts, R-Kan., predicted the Reagan administration within the next ten days to two weeks will offer subsidized wheat to the Soviet Union under the Export Enhancement Program, EEP. Roberts made the comment at a press conference held by Republican members of the House Agriculture Committee. He did not say on what he based the comment, but an aide said Roberts had been in touch with top Republican officials recently. The possibility of an expansion of EEP to include wheat to Moscow has been rumored for some time, and some industry sources believe a decision on the issue will be made by the Reagan administration before Secretary of State George Shultz goes to Moscow in April.
Corporate News
SUN CITY INDUSTRIES <SNI> SEES HIGHER NET
Sun City Industries Inc said preliminary unaudited results of ongoing operations for the fiscal year ended January 31, 1987 are expected to rise over 580 pct to 700,000 dlrs or 70 cts per share from the 125,313 dlrs or 12 cts reported last year. Total net income is expected to reach 2.4 mln dlrs, which includes 1.7 mln dlrs of net income realized from sale of property. The combination will result in record earnings of 2.40 dlrs a share, the wholesale distributor and processor of eggs said.
Corporate News
YEUTTER SAYS STOCK MARKET OVERREACTED TO JAPAN TRADE DISPUTE
YEUTTER SAYS STOCK MARKET OVERREACTED TO JAPAN TRADE DISPUTE
Financial Reports
ST LAWRENCE SEAWAY OPENS SHIPPING SEASON
The St Lawrence Seaway said the first ship of the season passed through the St Lambert lock here this morning, officially opening the 2,300-mile-long waterway's 1987 shipping season. The seaway has said it expects little increase in freight levels this year from last year when it moved 37.6 mln tonnes of freight between Montreal and Lake Ontario and 41.6 mln tonnes on the Welland Canal, which links Lake Erie and Lake Ontario. The canal is scheduled to open tomorrow. Officials expect the waterway to lose nine to ten mln Canadian dlrs this year, about the same as the estimated deficit for fiscal 1986-87, which ends today.
Financial Reports
ACTON <ATN> TO SELL UNIT FOR GAIN
Acton Corp said it has agreed to sell its five Michigan cable television systems to Wisconsin Cablevision Inc for about 9,500,000 dlrs, resulting in a gain of about six mln dlrs. The company said the sale is subject to review by local authorities. The systems have about 7,500 subscribers. Acton said proceeds will be used to retire bank debt. The company said it has also entered into a 15.5 mln dlr bank credit agreement that will allow it to complete the prepayment of all its obligations to members of its present bank syndicate. The company said the new credit will also allow it to prepay some other debt and redeem its Class C Series Two preferred stock. It said the new facility has allowed it to take full advantage of an early payment discount of about 13 mln dlrs in principal and interest which was negotiated with its banking syndicate in connection with an April 1986 financial restructuring.
Financial Reports
BEGHIN-SAY SAYS SUGAR OFFER TO EC STILL STANDS
A plan by European producers to sell 854,000 tonnes of sugar to European Community intervention stocks still stands, Andrea Minguzzi, an official at French sugar producer Beghin-Say, said. Last week Beghin-Say president Jean-Marc Vernes said a possible settlement of a row with the EC would lead producers to withdraw their offer, which was made as a protest against EC export licensing policies. The EC policy is to offer export rebates, which fail to give producers an equivalent price to that which they would get by offering sugar into intervention stocks, Vernes said. But Minguzzi said the offer was a commercial affair and that producers had no intention of withdrawing the sugar offer already lodged with intervention boards of different European countries. He said final quality approval for all the sugar offered could come later this week. Some 95 pct had already cleared quality specifications. The EC can only reject an offer to sell into intervention stocks on quality grounds. Minguzzi added that under EC regulations, the Community has until early May to pay for the sugar. He declined to put an exact figure on the amount of sugar offered by Beghin-Say, but said it was below 500,000 tonnes.
Commodities and Trade
EXXON <XON> GAINS DUE TO STREAMLINED OPERATIONS
Exxon Corp said that 1986's 15 pct increase in earnings per share to 7.42 dlrs a share were partially based on its streamlined operations which compensated for the weakness in its exploration earnings and the lowest crude oil prices in a decade. Exxon said economies introduced in its operations from reductions in personnel and other savings, such as reductions in exploration expenses, were reflected in an 880 mln dlr reduction in consolidated operating costs from 1985. The company said its more efficient operations would be necessary to offset more adverse oil market conditions ahead. The company also said that its share repurchase plan contributed to the per share gains over 1985. In a breakdown of costs, Exxon said that operating expenses slipped to 9.2 billion dlrs in 1986 from 9.7 billion dlrs the previous year and exploration expenses, including dry holes, slipped back to 1.2 billion dlrs from 1.5 billion dlrs over the same period as the number of wells drilled was lower. The company was also able to use lower interest rates to reduce its interest expenses to 614 mln dlrs in 1986 from 627 mln dlrs the previous year. Exxon said that the ratio of debt to capital was cut by 1.6 pct in 1986 from the previous year to 19 pct. On December 31, 1986 Exxon's total debt of 7.87 billion dlrs was down slightly from the previous year's 7.9 billion dlrs and long term debt stood at 4.3 billion dlrs, down from 4.8 billion dlrs in 1985. Exxon's policy of repurchasing shares on the market for its treasury also contributed to earnings results by a reduction of shares to 722.6 mln shares from 754.1 mln shares the previous year.
Commodities and Trade
U.S. STOCK MARKET OVERREACTS TO TARIFFS - YEUTTER
U.S. Trade Representative Clayton Yeutter said the stock market overreacted to a U.S. decision last week to proceed with tariffs on some Japanese computer products. Speaking to reporters prior to testifying at a House Agriculture Committee hearing, Yeutter said it is "difficult to comprehend" that a trade decision affecting only 300 mln dlrs in goods caused the stock market collapse yesterday. "I have a hunch a lot of other things were involved in that (stock market fall), including simple profit-taking," Yeutter said. Yeutter said Japan would be sending a senior official from its trade ministry to Washington next week for talks on the computer chip dispute. "We will be glad to have him here, but that's not going to affect a decision that's already been made," Yeutter said. The decision announced last week would apply higher tariffs on a range of Japanese products in retaliation for the alleged failure of Tokyo to honor an agreement with the U.S. on semiconductor trade.
Financial Reports
WEATHER HURTING YUGOSLAV WHEAT - USDA REPORT
Unfavorable late winter weather conditions in the main wheat growing areas of Yugoslavia indicate dimmed prospects for the emerging winter wheat crop, the U.S. embassy's agricultural officer in Belgrade said. The officer, who travelled through an area from Belgrade to Subotica, said in a field report dated March 27 the wheat crop had been set back at least three weeks because of a cold spell that followed a period of warm weather. He said unseasonably warm weather in late February that brought the wheat crop out of winter dormancy early was followed by three weeks of unusually cold weather. Damaging effects were seen in the fields, most of which show stands with a yellow-brown cast indicating extensive leaf and possible root damage from repeated freezings, he said. The report said that since much of the early growth in February was from late seeding rather than from normal development, his view was that the damage may be more extensive than some local observers say. The most seriously affected fields were late-seeded fields on normal maize soils. Stands in these fields were thin and chances of recovery appeared less favorable, he said. However, he said soil moisture conditions were favorable and many of the fields had already been top-dressed, which would aid recovery.
Commodities and Trade
USX <X>, CONSOLIDATED NATURAL <CNG> END TALKS
USX Corp's Texas Oil and Gas Corp subsidiary and Consolidated Natural Gas Co have mutually agreed not to pursue further their talks on Consolidated's possible purchase of Apollo Gas Co from Texas Oil. No details were given.
Financial Reports
ARVIN INDUSTRIES SEES FLAT 1ST QTR PER SHARE NET COMPARED WITH 59 CTS LAST YEAR
ARVIN INDUSTRIES SEES FLAT 1ST QTR PER SHARE NET COMPARED WITH 59 CTS LAST YEAR
Financial Reports
ROCKY MOUNT <RMUC> EXPECTS PROFIT IN FIRST QTR
Hal Weiss, chairman, president and chief executive officer, of Rocky Mount Undergarment Co Inc, said he expects the company to show a profit for the first quarter fiscal 1987. Weiss said sales for 1987 have been strong following a net loss of 1,548,000 dlrs, or 53 cts a share, for the fourth quarter of fiscal 1986. The company reported a net loss for the year of 2,408,000 dlrs, or 82 cts a share. Rocky Mount recorded net income of 248,000 dlrs, or eight cts per share, for the first quarter of fiscal 1986. Weiss attributed the poor year to problems involving management, manufacturing operations, financial condition and credibility among its suppliers. Weiss predicted the pattern of quarterly lossses which characterized 1986 will be reversed and 1987 will see the company return to profitability.
Corporate News